Employee Secondaries
5/4/25 Benchmarks for Operators
Why does half the software built for CFOs look like it was designed in 2003… by someone who hates joy?
Finance teams deserve better.
Mercury gets it. They built a banking* experience that’s actually enjoyable (speaking as a customer here). It’s clean. It’s powerful. It works.
Not only does Mercury offer banking* — it also offers financial software with smart workflows, tactical tools, and useful templates.
Speaking of templates…
Mercury’s own CFO, Daniel Kang, is sharing his personal forecast model — the one he’s used to raise capital, update the board, and guide ops.
Whether you’re prepping for a fundraise, revising plans, or just making sense of the madness, this model will help you align your team, clarify goals, and communicate with confidence.
*Mercury is a financial technology company, not a bank. Banking services provided through Choice Financial Group, Column N.A., and Evolve Bank & Trust; Members FDIC.
Anthropic is letting employees sell shares for the first time.
According to The Information, Anthropic is offering to buy back shares from hundreds of current and former employees, the first transaction of its kind for the four-year-old company.
The buyback is priced at the same $61.5 billion valuation it reached in its March raise.
Tender offers like this hinge on three things:
Who: Current and / or former employees
How Much: A set percentage of vested equity, with a hard dollar cap
Service: Sometimes there's a tenure requirement
In Anthropic’s case, both current and former employees can sell up to 20% of their total vested equity, capped at $2 million per person.
The mechanics matter because they signal management’s mindset, rewarding loyalty without draining motivation.
Compare that to Rippling, which excluded ex-employees who had gone to competitors (like Deel). Or ScaleAI, which allowed zero former employees to sell in a recent tender.
These transactions—commonly called tender offers—are now a mainstay at unicorns who’ve been private for nearly a decade. They sometimes accompany a primary fundraise or act as pressure relief if the IPO timeline drags.
OpenAI has reportedly let employees sell $2.7B worth of shares to date. Figma and Databricks also ran large tenders last year.
So why now for Anthropic?
It’s not that they’ve been around forever (which were motivations to run secondaries for companies like Airbnb and Stripe). It’s that their valuation is sky high and they’ve raised capital constantly. Think: they’re trading in the same ballpark as Datadog or Snowflake in the public markets.
Frankly, I’m surprised this didn’t happen sooner.
As someone who's wired hundreds of millions in secondaries, I can tell you, those wires hit different. You keep it professional, but it’s hard to ignore the fact that you're changing someone’s life forever.
So why do companies do this?
Well, there are three audiences to consider:
1. Employees
Founders and early employees can’t live on ramen forever. Tender offers de-risk their commitment. They get something tangible for years of sweat, even if the company never IPOs.
And let’s not forget taxes: exercising options and covering AMT can be brutally expensive (I’ve personally gone broke in an attempt to get rich multiple times)
2. Investors
Tender offers give them a chance to increase ownership, especially if they were under-allocated in a primary raise.
It’s interesting that Anthropic is buying back shares rather than bringing in third-party buyers. That could hint they think their shares are undervalued.
When primary rounds get oversubscribed, tender dollars are the next-best currency. CFOs often carve out secondary slices for “friendly” investors to help them quietly ratchet up their stake (there’s very much a preferential game behind the game that goes on here).
3. The Company
Secondaries are a low-drama way to clean up the cap table. Some early angels or advisors have outlived their usefulness (think: that pre-seed investor from your local chess club). If the price is right, send them on their way—grateful, wealthy, and off Carta.
These offers can also ease the sting of org changes. When new execs are brought in post-fundraise, early employees may get leveled. Giving them a liquidity window cushions the blow. Getting benched is never fun—but it hurts less if it comes with jet ski money.
What’s being sold?
Tender offers typically involve common shares, while primary rounds create preferred shares (which come with liquidation preferences and voting power).
Because of this, common shares often sell at a ~20% discount to the preferred price.
But in hot markets (like this AI boom), buyers don’t care. In 2021-22, employees got the same price for common shares as the company got for preferred. Sounds like Anthropic employees will, too.
If the company IPOs, everyone usually converts into the same share class. But if things go south, common holders are last in line. It’s a risk investors are willing to take for cap table real estate.
Typical participation criteria
Must have vested shares (i.e., cleared the 1-year cliff)
Must have exercised options (unless the company allows cashless exercise, which is dope, but employees get slammed with ordinary income tax rates)
Must attest to being an accredited investor (means you are smart enough to make the choice to sell… just an employer CYA)
Founders must disclose their sale amount (awkward turtle when employees read about it in the fine print of the sales docs, which get distributed)
Caps are often ~20% of holdings (either vested or total) or $2M–$5M max
Larger founder sales (e.g., $10M+) tend to trigger board debates
Sometimes, there’s a minimum sale threshold to participate—this is strategic. It pushes out smaller holders the company may want off the cap table.
The Good, Bad, and Ugly
Good: Stripe—allowed employees to sell multiple times as they stay private.
Bad: Hopin—founder Johnny Boufarhat sold up to $130M in just two years.
Ugly: Pipe—execs cashed out, then essentially group-quit.
Really Ugly: WeWork—Adam Neumann secured the bag and then some.
Equity is a tool. Don’t screw it up.
Equity is a motivational tool. Don’t let it rot on the vine, but don’t let people cash out and ghost either.
Get employees some liquidity so they feel seen. And get investors to their “meaningful” ownership targets—some won’t get out of bed in the morning for less than a $50M stake.
There’s an art to making people rich… just not too rich.
TL;DR: Multiples are UP week-over-week.
Top 10 Medians:
EV / NTM Revenue = 14.5x (UP 0.5x w/w)
CAC Payback = 30 months
Rule of 40 = 52%
Revenue per Employee = $405k
Data source: Koyfin
Figures for each index are measured at the Median
Median and Top 10 Median are measured across the entire data set, where n = 111
Population Sizes:
Security: 18
Database and Infra: 14
Backoffice: 16
Marcom: 16
Marketplace: 15
Fintech: 16
Vertical SaaS: 16
Revenue Multiples
Revenue multiples are a shortcut to compare valuations across the technology landscape, where companies may not yet be profitable. The most standard timeframe for revenue multiple comparison is on a “Next Twelve Months” (NTM Revenue) basis.
NTM is a generous cut, as it gives a company “credit” for a full “rolling” future year. It also puts all companies on equal footing, regardless of their fiscal year end and quarterly seasonality.
However, not all technology sectors or monetization strategies receive the same “credit” on their forward revenue, which operators should be aware of when they create comp sets for their own companies. That is why I break them out as separate “indexes”.
Reasons may include:
Recurring mix of revenue
Stickiness of revenue
Average contract size
Cost of revenue delivery
Criticality of solution
Total Addressable Market potential
From a macro perspective, multiples trend higher in low interest environments, and vice versa.
Multiples shown are calculated by taking the Enterprise Value / NTM revenue.
Enterprise Value is calculated as: Market Capitalization + Total Debt - Cash
Market Cap fluctuates with share price day to day, while Total Debt and Cash are taken from the most recent quarterly financial statements available. That’s why we share this report each week - to keep up with changes in the stock market, and to update for quarterly earnings reports when they drop.
Historically, a 10x NTM Revenue multiple has been viewed as a “premium” valuation reserved for the best of the best companies.
Efficiency Benchmarks
Companies that can do more with less tend to earn higher valuations.
Three of the most common and consistently publicly available metrics to measure efficiency include:
CAC Payback Period: How many months does it take to recoup the cost of acquiring a customer?
CAC Payback Period is measured as Sales and Marketing costs divided by Revenue Additions, and adjusted by Gross Margin.
Here’s how I do it:
Sales and Marketing costs are measured on a TTM basis, but lagged by one quarter (so you skip a quarter, then sum the trailing four quarters of costs). This timeframe smooths for seasonality and recognizes the lead time required to generate pipeline.
Revenue is measured as the year-on-year change in the most recent quarter’s sales (so for Q2 of 2024 you’d subtract out Q2 of 2023’s revenue to get the increase), and then multiplied by four to arrive at an annualized revenue increase (e.g., ARR Additions).
Gross margin is taken as a % from the most recent quarter (e.g., 82%) to represent the current cost to serve a customer
Revenue per Employee: On a per head basis, how much in sales does the company generate each year? The rule of thumb is public companies should be doing north of $450k per employee at scale. This is simple division. And I believe it cuts through all the noise - there’s nowhere to hide.
Revenue per Employee is calculated as: (TTM Revenue / Total Current Employees)
Rule of 40: How does a company balance topline growth with bottom line efficiency? It’s the sum of the company’s revenue growth rate and EBITDA Margin. Netting the two should get you above 40 to pass the test.
Rule of 40 is calculated as: TTM Revenue Growth % + TTM Adjusted EBITDA Margin %
A few other notes on efficiency metrics:
Net Dollar Retention is another great measure of efficiency, but many companies have stopped quoting it as an exact number, choosing instead to disclose if it’s above or below a threshold once a year. It’s also uncommon for some types of companies, like marketplaces, to report it at all.
Most public companies don’t report net new ARR, and not all revenue is “recurring”, so I’m doing my best to approximate using changes in reported GAAP revenue. I admit this is a “stricter” view, as it is measuring change in net revenue.
Operating Expenditures
Decreasing your OPEX relative to revenue demonstrates Operating Leverage, and leaves more dollars to drop to the bottom line, as companies strive to achieve +25% profitability at scale.
The most common buckets companies put their operating costs into are:
Cost of Goods Sold: Customer Support employees, infrastructure to host your business in the cloud, API tolls, and banking fees if you are a FinTech.
Sales & Marketing: Sales and Marketing employees, advertising spend, demand gen spend, events, conferences, tools.
Research & Development: Product and Engineering employees, development expenses, tools.
General & Administrative: Finance, HR, and IT employees… and everything else. Or as I like to call myself “Strategic Backoffice Overhead.”
All of these are taken on a Gaap basis and therefore INCLUDE stock based comp, a non cash expense.
Hi,
I’ve been experimenting with integrating Koyfin into my Substack to create an interactive feature I’m calling the Market Lab — basically a curated dashboard of real-time charts, macroeconomic trends, and sector-level visuals.
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Happy to share the setup or even collaborate on a cross-post using shared dashboards or economic outlooks. Let me know if you’re interested!